Gambia’s Debt-to-GDP Ratio Improves as Finance Minister Highlights Economic Progress

In a recent address to lawmakers, Seedy Keita, Gambia’s Finance and Economic Affairs Minister, shared positive news about the country’s economic situation.

Keita revealed that Gambia’s debt-to-GDP ratio has decreased from 85% to 72% in less than two years. This improvement showcases the nation’s commitment to fiscal responsibility and economic growth.

Keita emphasized that Gambia has never experienced debt distress, unlike some other African countries. He confidently stated that Gambia’s debt remains sustainable and continues to follow a downward trend.

This assertion challenges the misconception that Gambia is the most indebted country in Africa. The Finance Ministry has been diligent in assessing the impact of currency depreciation on public debt.

As of December 2023, the depreciation of the dalasi and foreign currency debt amounted to 7.56 billion out of the total loan stock of 110 billion dalasi.

Keita provided context for Gambia‘s current financial situation by discussing the country’s debt history. In 2017, the new administration inherited significant financial challenges.

This included an overdrawn Treasury Main Account totaling 10.8 billion dalasi. This unrecorded debt posed a substantial burden on the system.

To address these issues, the government took decisive action. In 2018, they assumed NAWEC’s liability and issued a seven-year market bond worth 1.7 billion dalasi.

Managing Debt and Infrastructure Investment

Additionally, they tackled unconfirmed debts totaling 2.4 billion dalasi. The minister outlined various infrastructure projects financed through borrowing since 2017.

These include the new Bertil Harding Highway, phase one of The University of The Gambia, and improvements to the Banjul International Airport. Such investments aim to boost the country’s development and economic prospects.

Regarding currency exchange rates, Keita explained that the Gambia follows an open market regime. This approach allows market forces of supply and demand to determine exchange rates, rather than government control.

This policy aligns with modern economic practices and promotes transparency in financial transactions. Overall, Keita’s address paints a picture of a country making steady progress in managing its debt and investing in its future.

While challenges remain, Gambia’s improving debt-to-GDP ratio and commitment to sustainable economic policies suggest a positive outlook for the nation’s financial health.